The Warehouse Group tops retailers for wage subsidies at $67m

Thursday, 9 April 2020

By early April, $4.8 billion had been paid out as part of the Government's wage subsidy scheme in only two weeks.

The Warehouse Group has received $67.7 million from the Government's wage subsidy scheme to support the jobs of over 11,000 staff.

The company told the NZX on Thursday that the money was split between its The Warehouse and Warehouse Stationery chains ($52m), Noel Leeming ($12.2M), Torpedo7 ($3.2m) and the TheMarket.com ($400,000).

'The receipt of this funding is crucial to the group maintaining its workforce while stores remain shut,' it said in a statement.

The Warehouse stores are closed but several are being used to help fulfil onlline orders.

The payout well exceeds those to other retailers like Kmart, Kathmandu and electronics and furniture retailer Harvey Norman, the latter receiving $12.7m for its 1850 staff.

* Coronavirus: Businesses that claimed $5.3 billion in wage subsidies named

* Coronavirus: Businesses face abuse for operating during Covid-19** lockdown

Retail consultant Chris Wilkinson of First Retail Group, said he thought it was only fair The Warehouse could access the wage subsidy, even though it was able to sell at limited capacity online, as it was a key employer in many areas.

'The strength of businesses like this is integral to the wider recovery of our economy - both from a social and commercial standpoint.

'We know that businesses selling essential products have been doing well in terms of orders, however this in no way makes up for the loss of customers that would otherwise walk through their doors each day.'

The lead-up to Easter was traditionally a very busy time, he said. Discounted Easter eggs being sold on the retailer's website were an example of stock that the retailer was having to move quickly because people's buying habits had been disrupted.

So far the Government has paid out over $7 billion in wage subsidies in the last two weeks, more than is usually paid out in unemployment and sole-parent benefits in an entire year.

Businesses that receive the subsidy are signalling that they intend to keep their staff on after the lockdown. They must also try to pay up to 80 per cent to workers' normal wages.

The group said that all its five major brands are now allowed to sell essential goods online.

Chris Wilkinson says retailers selling essential items are still taking a big hit to earnings.

A denim jacket being sold on The Warehouse's website. Basic clothing has been classified as ''essential'' and many items have been in hot demand.

Before the lockdown, it announced its The Warehouse stores would remain open as an essential service, but they was forced to close after the Government refined its definition of what was essential.

A few days later The Warehouse stores opened online to sell basic winter and health-related goods.

Online demand for some of The Warehouse's goods and clothing has been so strong that the company has apologised to customers, saying it was working to bring in fresh stock.

The group also said it had secured $150m of additional banking facilities, which extended its total debt facilities to $330m The extra funding would help pay for $125m in bonds maturing in June.